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International Alliance Agrees on Air Ticket Tax

A French initiative to tax airline tickets to boost funds for developing nations won limited support at an international conference that wrapped up in Paris Wednesday.

Airlines are wary at the idea of a levy on tickets

The tax is to be imposed by 12 countries, including Brazil, Chile, Cyprus, Congo, France, Ivory Coast, Jordan, Luxembourg, Madagascar, Mauritius, Nicaragua and Norway, according to French officials at the end of the two-day conference gathering representatives from 95 countries.

In addition, Britain, while not introducing a new tax, will divert money from an existing surcharge on air travel to the same end: combating AIDS, tuberculosis and malaria in poor countries, especially Africa.

Hesitation

Jacques Chirac initiated the plan

French officials called the conference a success in getting other countries to adopt the idea championed by President Jacques Chirac -- despite the small number of states that have joined so far and the hesitation of other big Western countries with high numbers of airline passengers.

The United States opposes the plan, as does the airline industry and business groups, fearing it would burden carriers already struggling with high oil prices and fierce competition.

But UN Secretary General Kofi Annan, speaking at the opening of the conference on Monday, hailed the initiative, saying it contributed to the international community meeting its commitment under the Millennium Development Goals agreement reached in 2000.

That agreement aims to increase public aid to developing nations to help them fight poverty, disease and hunger.

But, as Annan and Chirac pointed out, governments' pledges are falling short of the money promised, requiring new ideas to come up with the funds, such as the airline tax.

France leads the way

France will in July be the first country to apply the new tax, which will add one to 40 euros ($1.2 to $47) to the price of air tickets, depending on the distance travelled and the class of seat. That is expected to raise 200 million euros per year in development aid.

Philippe Douste-Blazy (left)

Foreign Minister Philippe Douste-Blazy said the money would go to a central medicine buying facility France and Brazil are working to set up which would notably work to give AIDS and HIV sufferers cheaper and easier access to anti-retroviral drugs.

The United States, however, is hostile to that idea and was only present at the conference in the status of observer, not participant.

Germany drags its feet

A further 25 countries, including Germany, Belgium, Austria, South Africa, South Korea and Mexico, elected not to impose the tax but were willing to make financial contributions to the project -- much to the chagrin of the German Green party, which urged Berlin to follow the French example.

Thilo Hoppe, who heads the Bundestag's Development Committee, told the Neue Osnabrücker Zeitung that he was disappointed by the government's failure to get on board.

"The least it can do is to follow France's lead," he said. "(The tax) would be a first step," he added, towards achieving the increase in the development budget set for 2015.

Optimism

Overall, the head of the UN agency fighting AIDS, Peter Piot, said he was optimistic about the moves sponsored by France and Brazil.

It was "absolutely necessary" for countries to come up with new ways of raising development aid, he told AFP, but only "on condition that that is not a pretext for states to reduce their contributions elsewhere."

An AIDS orphan near Johannesburg, South Africa

France's extra 200 million euros per year could provide anti-retroviral medicine to 1.3 million HIV-positive patients, he said.

"Six billion dollars are allocated to fighting AIDS and HIV, while 15 billion are needed in 2006 and more than 20 billion per year after 2008," Piot said.

The least developed nations, mainly those in Africa, "will always need outside aid," he said.